Can you buy a Tesla with Dogecoin?
The reasons argued by the company to stop accepting BTC were the high carbon emissions produced by Bitcoin mining, especially when miners use thermoelectric energy such as coal to process operations and mine blocks.In mid-June, Elon Musk opened the door to Bitcoin, arguing that if mining using renewable energy rises by 50%, he would consider returning to accepting BTC in Tesla.
Although it was born as a meme or parody of cryptocurrencies, over time it has gained unsuspected adoption. Unlike Bitcoin and Ethereum, it does not require great computational power to be mined, but it has an infinite supply of tokens, so it is considered an inflationary cryptocurrency.
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Being a hard fork of Litecoin, transactions made with Dogecoin are fast and cheap. As long as the network is not saturated, the maximum cost for transferring through the Dogecoin network is 1 doge. On the other hand, centralized exchanges (CEX) may have higher withdrawal fees.
The case of Tesla and Bitcoin
The precedents between Tesla and Bitcoin may shed light on the adoption of Dogecoin by the leading electric car company. In February 2021 Tesla announced that it had purchased $1.5 billion in Bitcoin, and in March it began accepting the cryptocurrency as a means of payment.
The idyll was short-lived. On May 13 Tesla announced that it would stop using Bitcoin as a form of payment. The company’s reasons for no longer accepting BTC were the high carbon emissions produced by Bitcoin mining, especially when miners use thermoelectric power such as coal to process transactions and mine blocks.
In mid-June, Elon Musk hinted at Bitcoin, arguing that if mining using renewable energy goes up 50%, he would consider accepting BTC back at Tesla. In all these cases, both the car company and Musk himself demonstrated their power to drive the price of BTC up and down.
The gradual acceptance of a currency like Doge at Tesla is due not only to Musk’s relationship with the currency, but also to the low power it requires to process transactions. Although by January 2022 it may not yet be possible to buy a Tesla with Dogecoin, this may change in the near future.